Revenue growth is one of the most popular strategy case in a case interview
Usually, growth strategy cases are introduced by open-ended questions such as “A firm XYZ wants to increase their revenue. How should they go about it?”
Gather the necessary information about volume and price to determine the best growth lever
Revenue growth cases can be tackled by influencing two major parameters that determine growth figures. These are volume and unit price. In order to make suggestions, once again, you need to understand the client’s business and the industry. Growth strategies can focus on a product, a division, or on the company as a whole. Areas you could investigate based on your hypothesis:
- What is the client’s product mix? What's the lifecyle of each product?
- What is the state of the respective industries? Are they growing?
- Which product segments have the biggest potential?
- What drives customer satisfaction?
- How does the client’s sales growth rate compare to that of the competitors in the market?
- How are the client’s prices compared to that of competitors? For instance, if the product is a commodity, then prices should be similar
- What is the customers’ price sensitivity? If the product is a commodity, then customers are likely to be very price sensitive
- What are the client’s marketing and sales channel activities? Evaluate their effectiveness
- What are competitors’ marketing and sales channel activities? Evaluate the effectiveness if they are better than the clients’ sales
- What are the client’s available funds for growth (you can find it via balance sheet or cashflow statements)?
- What do the shareholders demand/expect?
Choose a growth strategy and the growth vector you want to pursue
After having gathered this set of information, you will have got a feeling for the type of growth that is demanded. Based on this information, you can then decide which growth strategy to implement. Roughly, you can subdivide strategies into (1) organic growth and (2) inorganic growth. The categories can further be organized using an ansoff matrix.
Find new customers by (Ansoff Matrix):
- Increase/switch distribution channels
- Expand the product lines
- Enter new markets
- Perform a major marketing campaign
- Increase your share of wallet with your existing customers e.g. by selling them add-on/bundled products
- Lower customer churn rate by preventing unwanted customer attrition
- Acquire other companies
If you have thoroughly completed this BootCamp, you will notice that many case types overlap with each other. You will rarely find a case that fits only one type. Most of the strategic decisions intersect. After completing the BootCamp, you should get a feeling for those connections and be able to see the big picture.